East Asian Economic Grouping

Proposed in 1990 by Malaysia's former Prime Minister Mahathir bin Mohamed, the East Asian Economic Group (EAEG) represented the idea of an exclusivist East Asian regionalism. As conceived by Mahathir, the EAEG would be Japan-led and would serve as a muchneeded counter to emerging regional blocs in Europe and North America. The proposed group included the ten Southeast Asian states, China, and Korea, in addition to Japan, but notably excluded both the United States and Australia. The creation of the European Union (EU) under the 1992 Maastricht Treaty and the signing of the 1992 North American Free Trade Agreement (NAFTA) were important factors behind Mahathir's argument that East Asia needed its own bloc.

The EAEG encountered strong opposition from the United States and Australia. Under President George H. W. Bush, the United States successfully pressured key Asian allies, especially South Korea and Japan, not to support the EAEG. Fear of U.S. protectionism or a U.S. backlash was enough to persuade most East Asian states, whose economic and political survival depended on access to the U.S. market, to withhold their support for the EAEG. East Asian states subsequently rejected the EAEG proposal in favor of an East Asian Economic Caucus (EAEC) within the Asia-Pacific Economic Cooperation forum (APEC). Under President Clinton, the United States continued to oppose the EAEG but did so mainly by giving new support to APEC. U.S. support for APEC is widely seen as a successful preemptive move against the EAEG and any other East Asia-type arrangements. The EAEG and APEC are often conceptualized as rivals.

Seven years later, the Asian financial crisis gave new life to Mahathir's East Asia ideas. Regional resentment toward the International Monetary Fund (IMF) and U.S. handling of the crisis intensified interest in an East Asian group, which took the form of the Association of Southeast Asian Nations (ASEAN) Plus Three (APT) framework. Though the APT framework precedes the Asian financial crisis (it emerged from the Asia-Europe meetings), most consider the APT framework “the EAEG by another name.”